Empty Nesters can’t afford to downsize

The following is from the Boston Globe:

 When did downsizing become as expensive as upsizing? For many older homeowners in Massachusetts today, there’s no place like the home they’re already in  —  as in no place to go. This is especially true for those who live in cities and towns 25 miles or more from Boston, where home prices have yet to climb back to the heights they reached before the economy plunged in 2008. In Plymouth, the median sale price of a single-family home at the end of 2017 was about 4 percent below its pre-recession peak in 2005. Towns such as Hyannis and Southbridge sat deeper in the hole  —  still more than 15 percent down. Compare that with Cambridge, where the median sale price rose by 96 percent between 2005 and 2017. In parts of Boston, prices have outright doubled since 2005. Never has home-value disparity in Eastern Massachusetts been so extreme.

Even couples with considerable resources can blanch at what it costs to move into the city. With their youngest child about to head to college, Wellesley residents Andrew and Marian Wrobel began contemplating selling their five-bedroom home last year. In retrospect, it almost sounds naive, but the Wrobels thought that for $800,000 to $1 million, they could find a three-bedroom condo in Charlestown or the Seaport District big enough for their two children to comfortably stay overnight on visits, and in walking distance of restaurants, shops, and public transportation. After a few months of repeated trips into the city to scope out the possibilities, reality prevailed. “There just isn’t much for sale at that price,” says Andrew, who is 55. “And what there is is very small.” In January they bought a four-bedroom, four-bath condo on the second and third floors of a 100-year-old house in Watertown, a much shorter commute for Marian, who works in Cambridge. “We added quality of life while putting money in our pocket, and downsizing some,” Andrew says.

There is little appeal to swapping out a comfortable suburban house for a 350-square-foot condo in Boston whose biggest selling point is its proximity to a T stop. There is no appeal to taking out a new mortgage at age 54 or older instead of feeding a 401(k). “Empty nesters are losing out,” says Marie Presti, president of the Greater Boston Association of Realtors and owner of The Presti Group in Newton. “They should be downsizing, but it’s not saving enough money for them to make the move.”

Instead, many are hunkering down in three- and four-bedroom houses, hoping for the best further along the road of life. A Realtor.com survey last summer found that 85 percent of homeowners nationwide over age 55 didn’t plan to sell during the following 12 months. That accounted for 33 million properties, most of which will likely remain off the market for the next 12 months, too.

“People are staying in their homes longer,” confirms Nela Richardson, chief economist at the real estate firm Redfin. “And not just boomers, but Gen Xers, as well.” A decade ago, Richardson tells me, people swapped homes an average of every 4.5 years. Today, that figure is closing in on 10. According to a 2017 National Association of Realtors report, repeat buyers expect to remain in their homes for a median of 15 years, up from nine in 2006.

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